Da Nang’s Index of Industrial Production (IIP) in the first half of the year reached a growth rate of 3.07%, which has not yet reached the plan of 4-5% set out at the beginning of the year.

Apart from the difficult recovery of production and business activities in the city, the unstable world political situation has had a significant impact on the growth of the industry over the past time.

Production activities are observed at the Daiwa Vietnam Co., Ltd based in the Hoa Khanh Industrial Park, Lien Chieu District. Photo: KHANH HOA

Decline in some industrial production fields

According to a report released by the municipal Department of Industry and Trade, one of the main reasons affecting the city’s IIP in the first 6 months of the year is due to the plunge in production in the mining sector. The IIP of the mining sector during that period fell 28.88% year-on-year.

Besides, despite achieving a growth rate of 3.3% over the same period last year, in the secondary sub-sector of the processing and manufacturing industry, 14 out of the 22 sub-sectors reported their decrease in growth rate over the same period.

The IIPs of some industries fell very deeply such as manufacturing other means of transport down by 41.39%, manufacturing beds, cabinets - tables - chairs 20.42%, manufacturing machinery and equipment 17.84%, and textile industry 16.07%.

During the 6-month period, many industrial products experienced a deep decline due to a shortage of raw and input materials, and high production costs due to the increased prices of imported raw materials and fuel, and a limit on the output of products.

Specifically, the production of wood tables of all kinds declined by 70.0%, woven fabrics 55.6%, glues and adhesives 50.3%, unconcentrated milk and creamer products 44.3%, knitted clothing 40.8%, construction stones 30.7%, and cement 19.0%.

Mr. Huynh Trinh, the Director of Da Nang Forestry Export and Production JSC, based in the Hoa Cam Industrial Park in Cam Le District, informed that over the past months, the export of wood products has faced many difficulties due to the impact of the Russia - Ukraine conflict as well as the inflation in European countries.

Some customers have to extend the time to receive goods, even cancel orders, resulting in the slowdown of the output of wood products, and the increase in the company’s inventory.

In addition, months of May and June are the end of the manufacturing season of the wood industry, so most businesses only operate in moderation and focus on preparing materials for the new manufacturing season.

Workers at the Da Nang Rubber JSC based in the Hoa Khanh Industrial Park, Lien Chieu District. Photo: KHANH HOA

Speeding up production process in the rest of the year

According to the city’s Department of Industry and Trade, although the city’s has yet to fulfill its growth plan in the first half of the year, its economic recovery trajectory in general and the local production and business activities in particular are entering an 'accelerated growth' phase.

It is expected that by late July, 2022, the city’s IIP will achieve a growth rate of 4.5%, creating the premise for the whole industry to reach its goals.

Ms. Nguyen Thi Thuy Mai, Deputy Director of the municipal Department of Industry and Trade, said that the city has set the year’s industrial development plan targets. Particularly, the city’s IIP in 2022 will climb by 4-5%, the added value of the industry and construction by 6-7%, and the export turnover of commodities by 9-10%.

In an effort to reach the aforementioned targets, the city has taken such drastic solutions as issuing support policies for local enterprises, expediting the infrastructure construction at industrial parks and clusters, appealing for more investment inflows into new projects, and facilitating contractors to ensure the on-schedule implementation of large-scale projects.

Efforts will be made to create favourable conditions for existing enterprises to increase their operation capacity in order to contribute to the city's industrial growth, as well as to boost investment promotion activities in the Hi-Tech Park, Dedicated Information Technology Park, and other industrial parks. Also, a conference on connecting supporting industries in Da Nang will be organised.

As for consumer goods, the municipal Department of Industry and Trade will strengthen trade promotion activities, stimulates consumption of domestically produced goods, introduce locally-made products to the supply chains of distributors, and actively support enterprises to develop souvenir products.

Importance will be attached to completing the fishery service infrastructure at the Tho Quang Fishing Port and Wharf in a bid to create a source of raw materials for seafood processing and to associate fishing activities with logistics and seafood processing services.

With regard to the group of construction materials and mechanics manufacturing industries, the Department will pay attention to promoting construction activities, especially key and dynamic projects, as well as facilitating local building material manufacturers to supply products for the city budget-funded projects.

Heed will be paid to developing and implementing a project on development strategy for the city’s building material industry during the 2021-2030 period with a vision to 2050.

Along with great efforts made by all-level departments and sectors, industrial enterprises themselves continue to proactively take solutions to restore their production and business activities.

According to Mr. Huynh Trinh, his company is currently negotiating orders for the new production season, renewing machinery and equipment, and building a new 1,400m² factory to meet the goal of increasing capacity by 15-20%.

Meanwhile, Mr. Nguyen Van Phu, the Director of Daiwa Viet Nam Co., Ltd. based in the Hoa Khanh Industrial Park, Lien Chieu District, believed that from now till the end of the year, the company's production and business activities will be better with a growth target of about 10-15% compared to 2021.

Currently, the company’s new 40,000m² factory, based in the Hoa Khanh Industrial Park, with a capacity of 1,700 workers, has been put into operation. The purpose of the company is to expand production scale in the 10-year roadmap and meet sharply increasing orders from international markets such as the US, Japan, Singapore, Australia, France, Germany, New Zealand, and Russia.

Reporting by KHANH HOA - Translating by M.DUNG